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Intergenerational Transfers and Asset Inequality in Japan: Empirical Evidence from New Survey Data

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  • Hamaaki, Junya
  • Hori, Masahiro
  • Murata, Keiko

Abstract

This paper tries to quantitatively examine the impact of intergenerational transfers on asset inequality among Japanese households. For that purpose, we estimate an intergenerational asset transfer function with various control variables, using a unique micro dataset taken from the “Household Survey on Family Relationships, Employment, Retirement Payments, and Intergenerational Transfers of Assets and Education,” conducted by the Economic and Social Research Institute, Cabinet Office, Government of Japan. Employing three different models - a Tobit model, an interval regression model, and an ordered probit model - to ensure that our results are independent of the specific econometric approach used, we examine whether asset transfers received are correlated with households’ financial strength. We find that higher income households are likely to receive larger asset transfers. However, the contribution of intergenerational transfers to asset inequality appears to be quantitatively limited when measuring financial strength in terms of households’ life cycle wealth.

Suggested Citation

  • Hamaaki, Junya & Hori, Masahiro & Murata, Keiko, 2012. "Intergenerational Transfers and Asset Inequality in Japan: Empirical Evidence from New Survey Data," CIS Discussion paper series 544, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
  • Handle: RePEc:hit:cisdps:544
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    References listed on IDEAS

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    1. Lundholm, Michael & Ohlsson, Henry, 2000. "Post mortem reputation, compensatory gifts and equal bequests," Economics Letters, Elsevier, vol. 68(2), pages 165-171, August.
    2. Horioka, Charles Yuji, 2009. "Do bequests increase or decrease wealth inequalities?," Economics Letters, Elsevier, vol. 103(1), pages 23-25, April.
    3. Thomas A. Barthold & Takatoshi Ito, 1992. "Bequest Taxes and Accumulation of Household Wealth: U.S.-Japan Comparison," NBER Chapters,in: The Political Economy of Tax Reform, NBER-EASE Volume 1, pages 235-292 National Bureau of Economic Research, Inc.
    4. David Campbell, 1997. "Transfer and Life-cycle Wealth in Japan, 1974–1984," The Japanese Economic Review, Japanese Economic Association, vol. 48(4), pages 410-423, December.
    5. Fumio Hayashi, 1986. "Why Is Japan's Saving Rate So Apparently High?," NBER Chapters,in: NBER Macroeconomics Annual 1986, Volume 1, pages 147-234 National Bureau of Economic Research, Inc.
    6. Kotlikoff, Laurence J & Summers, Lawrence H, 1981. "The Role of Intergenerational Transfers in Aggregate Capital Accumulation," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 706-732, August.
    7. Junya HAMAAKI & Masahiro HORI & Saeko MAEDA & Keiko MURATA, 2011. "An overview of the Survey of Family Relationship, Job Experience, Retirement Allowances, and Intergenerational Transfers (in Japanese)," Economic Analysis, Economic and Social Research Institute (ESRI), vol. 184, pages 143-179, January.
    8. Aso, Yoshibumi, 1998. "Intergenerational Transfer through Inheritance," Economic Review, Hitotsubashi University, vol. 49(4), pages 289-296, January.
    9. Dekle, Robert, 1989. "The unimportance of intergenerational transfers in Japan," Japan and the World Economy, Elsevier, vol. 1(4), pages 403-413, November.
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    Cited by:

    1. Kiichi Tokuoka, 2012. "Intergenerational Implications of Fiscal Consolidation in Japan," IMF Working Papers 12/197, International Monetary Fund.

    More about this item

    Keywords

    Intergenerational transfers; Asset inequality; Japan;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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